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Stenham Asset Management has turned its back on Asian hedge funds with the launch of an emerging markets long-only fund, on the basis that it will cost far less for much the same service.

The Stenham Emerging Markets fund – the UK manager’s first fund of long-only funds – launched last month with $15m of seed capital.

The fund will invest in a portfolio of eight-to-10 managers of long-only equity strategies. It gained 1.55% in its first month.

Kevin Arenson, chief investment officer at Stenham, which runs $2.4bn, said that its Asian managers in the new fund typically charge a flat management fee of about 75 basis points and no performance fee.

He said: “Our experience with long/short emerging markets managers is that they tend to have a huge amount of market exposure, while hedging at the wrong time often detracts from performance. We wanted to reduce the overall fees of the portfolio.”

On top of the underlying managers’ fees, Stenham charges a 1% management fee and a 10% performance fee, on gains above a 5% hurdle.

Stenham aims to capture the growth of consumer spending among the middle classes in emerging markets such as China, India and Brazil.

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Arenson said that, while GDP growth in emerging markets has not translated to stock market returns, he thinks that there are opportunities for stockpickers to outperform. The managers in Stenham’s portfolio will avoid sectors such as commodities that tend to move up and down in line with the prevailing risk sentiment.

He said: “This is a very different product to an exchange-traded fund. It will navigate a different path to the equity indices.”

While assets run by the global hedge fund industry have surpassed their previous record, assets in the $83.3bn Asian hedge fund industry are a quarter of their 2007 peak, according to Hedge Fund Research. A report from data provider Eurekahedge last month said that 73 Asian hedge funds had closed down so far in 2012, and said over 123 disappeared last year.